Current events in the words of the students of Vinod Gupta School of Management, IIT Kharagpur

Month: February 2017

The following article is based on my own interpretation of the said events and/ or publicly available information. Any material borrowed from published and unpublished sources has been appropriately referenced. I will bear the sole responsibility for anything that is found to have been copied or misappropriated or misrepresented in the following post.

Fedal popularly known as Roger federer and Rafael Nadal. Roger is called as the greatest Tennis player of all time whereas Rafael Nadal is known as greatest clay court player of all time. Together they have won 32 grand slam titles. As far as their rivalry is concerned they have played 35 matches and 19 of the games have decided big finals. This was a highly anticipated grand slam final as Aus open title was on line and history was about to welcome the modern tennis greats.

Everybody knew that Roger was destined to break the all time record of Pete Sampras. Eventually the results were in favour of Roger and he was able to defeat Rafa but the game reach the anticipated height. The well fought battle between the two legends with many nerve wrecking moments lately swung in favour of Roger with score line 6-4, 3-6, 6-1, 3-6, 6-3.

But everything is not about result, it is not about Tennis: it is about the game as a whole. It is about Two old war horses with mutual admiration for each other and their class trying to better each other on many occasions in past. It is not about supporting one guy over the other. This is all about supporting a player. Despite Federer turning 36 this year and Nadal 31, and as both took several months off last year to recover from injury, fans may see few more clash between the sport’s greatest and most popular male players.

The following article is based on my own interpretation of the said events and/ or publicly available information. Any material borrowed from published and unpublished sources has been appropriately referenced. I will bear the sole responsibility for anything that is found to have been copied or misappropriated or misrepresented in the following post.

The market redesign of telecom market by the launch reliance jio has re-triggered the trend of mergers and acquisitions among tel-cos. The sector of telecommunication has seen several mergers in the past 4 years’ like MTS and Aircel merging in Reliance communications. But this merger talks between is Idea and Vodafone is about the fight to become no. 1 tel-cos in the country. It is about adding new customers and grow revenue market share(RMS), adding value to customer service by the high end experience of Vodafone and Idea’s distinct corporate ecosystem to drive the targeted synergies towards a healthier bottom-line. This merger will result in the country’s largest tel-co replacing Bharti Airtel.

Reliance Jio started its work by officially acquiring 95% of the shares of Himachal Futuristic Communications Ltd (HFCL) in 2012. But this plan started much before in 2010 when reliance industries on back hand with help of HFCL took PAN India license for 4G spectrum such that the other companies does not come to know and the spectrum could be purchased at much lower cost in 2010 spectrum auctions by TRAI. This blasting entry by Reliance industries in telecom sector in 2012 via Project Vijay, later changed to Reliance Infotel and then Reliance Jio created a bruising impact on the existing telecom companies in the market like Airtel, Vodafone, Idea, Tata Docomo, and BSNL. Specially the free voice and data service by Reliance Jio that was to be given till December 2016 and later extended till March 2017 has resulted in worse quarter for telecom companies disturbing their revenue model and decreasing their profits by as much as 60%.

To fight the current scenario Vodafone Group doesn’t have much of the choice but to accelerate its expansion moves in India- likely with the help of Idea Cellular. Although this acquisition will have several road blocks like Indus tower stake holding, regulatory hurdles associated with spectrum caps and significant market power in terms of combined customer base and RMS, but it can be dealt in a year time and by surrendering excess spectrum. Another major problem the existing tel-cos face against Jio is that they own license of only limited states across India like Idea have of only 11 circles, Vodafone in 14 circles, airtel in 16 circles only whereas Reliance Jio owns PAN India license across the country.

In a country like India whose telecommunication network is the second largest in the world by number of telephone users (both fixed and mobile phone) with 1.053 billion subscribers as on 31 August 2016 this process of competitiveness and mergers will not only create a big telecom giant in India but also will increase the competitiveness in the Indian telecom market in terms of providing quality service, technology and providing a competitive pricing to customer base in terms of adding value for them. And this competition will further facilitate a faster growth of country in a new direction towards the new era of digital transformation. The path on which the journey of success has started and will go beyond the infinity.

The following article is based on my own interpretation of the said events and/ or publicly available information. Any material borrowed from published and unpublished sources has been appropriately referenced. I will bear the sole responsibility for anything that is found to have been copied or misappropriated or misrepresented in the following post.

The ripples created by Vijay Mallya’s Kingfisher Airlines defaulting their repayments has not yet settled. The arrest of the top brass of IDBI Bank for approving Mallya’s loan has made the banks, especially the public sector to be cautious in dealing with the large non performing accounts. It seems that the stressed loan accounts may have to undergo the bankruptcy code and might not get a helping hand like they used to in the past. Previously, the banks used to take certain steps to help the corporate borrowers during stressful times. They often restructure through methods like lowering of the interest rates, increasing the payback period, conversion of debt into equity in which the bank appoint its representative in the director board, all of which actually helped these heavy borrowers to surpass their hurdles.

When the bankruptcy code is invoked as soon as the business is stressed out, without considering the restructuring option in fear of actions from enforcement agencies, the firms which otherwise might have had a huge chance of being revived, will get axed without even being given a second chance. This actually does more harm as once the firm is declared bankrupt, it can never be sold for the market valuation it had. The firms will be taken up for auction by the banks which fetches them only a depressed value or as in many cases, no takers at all. Thus the banks lose out again on a large chunk of its capital. At the end of all this the public funds are at stake due to this. Hence it is high time that the RBI come up with a structured procedure to revive large corporate firms depending upon their potential to rise again. Instead of writing off the large debts , it can actually be realized in most of the cases. The current behavior of the banks might only help the asset reconstruction firms.

The following article is based on my own interpretation of the said events and/ or publicly available information. Any material borrowed from published and unpublished sources has been appropriately referenced. I will bear the sole responsibility for anything that is found to have been copied or misappropriated or misrepresented in the following post.

Snapdeal has had a poor last year with their losses increasing from Rs 1328 crore in 2014-15 to Rs 3316 crore in 2015-16. This in addition to the speculations from investors has resulted in down-round for Snapdeal. A down-round means a reduced valuation of the start-up compared to that of the previous round. This down-round can affect the investors sentiments and its founders but it can also reduce the short-term pressure that Snapdeal faces. The reduced valuation can actually lead to smart business practices and making the business sustainable.

Other emerging start-ups can also learn from this to focus on effective business models instead of short-run marketing gimmicks like deep discounts. The flow of money and investments are not infinite and the start-ups should keep this in mind. The aggressive funding will eventually come down and this will balance the current start-up ecosystem of India. This is just the start of down-round and all the start-ups should make it a point to make their businesses sustainable, so that they are not affected by the increase or decrease of their valuations.

The following article is based on my own interpretation of the said events and/ or publicly available information. Any material borrowed from published and unpublished sources has been appropriately referenced. I will bear the sole responsibility for anything that is found to have been copied or misappropriated or misrepresented in the following post.

“Give me your tired, your poor, your huddled masses yearning to breathe free”. These are the words etched on the Statue of Liberty. These words are now deprived of their honour, thanks to the stringent immigrant control program in the United States. What an irony…

A reader lives a thousand lives before he dies. Of all the lives I seeped through, the one in the “Secret Annexe” left the most indelible mark. It was the hiding place of Anne Frank, a spirited young girl whose promise was cut short by the horrors of Second World War. “The Diary of a Young Girl” is a powerful testament to the savageries of war and the human spirit. When the pages on the right side slimmed down, I was losing a loyal friend and the agony was at its zenith.

11 years ago, in US, a volunteer was going through some files related to visa-pleas during the Second World War, the worst period in the world history. Of all the countless names, one hit him real hard. It was an Otto Frank. “U.S.A. is the only country we could go to,” he wrote. “It is for the sake of the children mainly.” The application did not go through. My friend, Otto Frank’s daughter, would have been 87 years old if that application had not remained in the red tape. She would have lived to tell about the ghastly war herself if the US did something different.

Trump regime has now gone for a blanket ban on immigration from 7 countries, including the war-torn Syria. It’s the image of Aylan Kurdi that is coming to my mind. People are desperately trying to cross the Mediterranean, thinking, the grass might be greener somewhere else. So hapless that mothers are ready to travel in overcrowded boats with their children. And everywhere, they are an unwelcome lot. Europe fought among themselves. People lambasted Angela Merkel. And now, the last nail in the coffin is from the US. When the world was trying to become a global village, some are trying to build walls. Remember what the Berlin wall did? Conservatism is getting buff again. US became what it is today from the hard works of a lot of people, immigrants included. Steve Jobs’ father was a Syrian refugee. Forgetting the roots will not augur well for anyone. Let us hope that the Mogul’s (Secret service code name for Donald Trump) stances are declared unconstitutional by the courts, who should be the bulwarks against Government abuses of power. Let the walls be broken. Integrate them in the society. Help them grow and grow with them.

“I keep my ideals, because in spite of everything I still believe that people are really good at heart”. These were the words of Anne Frank. Let us be optimistic and let us pray for respect for the words written on the Statue of Liberty.

The following article is based on my own interpretation of the said events and/ or publicly available information. Any material borrowed from published and unpublished sources has been appropriately referenced. I will bear the sole responsibility for anything that is found to have been copied or misappropriated or misrepresented in the following post.

Last week, on India’s Republic Day, Indian space agency ISRO gave the country its best gift by successfully testing its most powerful cryogenic engine, code-named C25. It was tested for a duration of 50 seconds at ISRO Propulsion Complex (IPRC) in Mahendragiri. This is the same technology which was used in Saturn V, which carried man to the moon in 1967. By testing an engine this powerful in the first attempt, ISRO has once again demonstrated its ability to work in new areas.

For those who are unfamiliar with this technology, Cryogenics is the study of substances at a temperature as low as 150 degree Celsius and lower. Since Cryogenic engines use liquid Oxygen and liquid Hydrogen as fuels at this temperature, they can be tricky to operate. Thus far, the US, Japan, China, France and Russia are the only countries to have tested Cryogenic engines.

In my opinion, this is a great news for India. Since Russia denied this technology to India under US pressure, it is a huge accomplishment for them to develop such a complex technology. With a powerful C25 backing the GSLV Mark III rocket, India is looking forward to launching its second moon mission – the Chandrayaan 2.

The following article is based on my own interpretation of the said events and/ or publicly available information. Any material borrowed from published and unpublished sources has been appropriately referenced. I will bear the sole responsibility for anything that is found to have been copied or misappropriated or misrepresented in the following post.

The country is fast moving from desktops to handled devices and smartphones are improving in their penetration and ease. This highlights the prominence of mobile banking in our lives. Quick adaption by a large chunk of the population, though sudden and to some extent forced, to mobile banking and e-wallets was one of the saving graces during demonetization. Making smartphones more affordable and promoting cheaper data services will be one of the key expectations. Affordable mobile handset or consumer durable items of a certain price limit may be given concessions on duties.

For the e-commerce market, particularly, major businesses have demanded clarity of FDI in B2C e-commerce through automatic route. Last year, the government allowed FDI into B2C e-commerce but disallowed the marketplaces like Flipkart and Snapdealto offer discounts to consumers thus ending the discount wars. Though consumers enjoyed the discount wars, brick and mortar stores claimed they suffered hugely due to such business tactics.

The government will want to put the country back on the high growth path. So, improving customer confidence and consumer spending will be vital as well.

The following article is based on my own interpretation of the said events and/ or publicly available information. Any material borrowed from published and unpublished sources has been appropriately referenced. I will bear the sole responsibility for anything that is found to have been copied or misappropriated or misrepresented in the following post.

As a part of Digital India initiative, the Indian government announced that it would provide free wifi to 1,050 villages in the next six months. The wifi hotspots will be mounted on towers so that maximum people can utilize this benefit. The Government has allocated Rs 420 crore for Digital Village Initiative and it aims to connect 900 million people in our country.

The aim of the government is to use digital technology to provide basic development services to rural areas, according to Indian Ministry of Electronics and Information Technology official, Aruna Sundararajan as reported by CNN Money. There will be a vast number of service providers who will be providing their service for this initiative. In addition to this, common service centers will also be set up for different digital services like online forms filling, paying digitally and much more.

This initiative will also accelerate India’s transition to a digital economy following the demonetization of Rs 500 and Rs 1000 notes.Currently, Google is providing free wifi at 100 railway stations across the country and over 10 million people are using this service daily. Wifi hotspots may work as an alternative technology for providing the internet to all. If this plan becomes successful, it will be expanded to the rest of the country.

The following article is based on my own interpretation of the said events and/ or publicly available information. Any material borrowed from published and unpublished sources has been appropriately referenced. I will bear the sole responsibility for anything that is found to have been copied or misappropriated or misrepresented in the following post.

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Donald Trump has banned immigration from seven predominantly Muslim countries in the Middle East and Africa. The new US President has imposed a controversial 90-day ban on travellers from Iran, Iraq, Libya, Somalia, Sudan, Syria and Yemen. But on the contrary, the Canadian Prime Minister Justin Trudeau is extending a warm welcome, irrespective of cast creed or race.

Justin Trudeau has a message to all refugees and immigrants. “To those fleeing persecution, terror & war, Canadians will welcome you, regardless of your faith”-the Canadian president tweeted.The refugee protection program of Canada is indeed a great example that all countries can follow. It has two main parts: The Refugee and Humanitarian Resettlement Program, for people seeking protection from outside Canada and the In-Canada Asylum Program for people making refugee protection claims from within Canada. Apart from this, the Canadian government also helps in the successful integration of all refugees.
Since 2015, Canadians have welcomed nearly 40000 refugees and they are expecting an increase in the inflow of refugees in 2017.Th is move is not only on humanitarian consideration but also aimed at higher economic growth through the contribution of refugees to the nation’s development. However, without any doubt, we can say that this great gesture by the Canadians towards the refugees is the truest exemplification of the idea, “Atithi Devo Bhava.”

The following article is based on my own interpretation of the said events and/ or publicly available information. Any material borrowed from published and unpublished sources has been appropriately referenced. I will bear the sole responsibility for anything that is found to have been copied or misappropriated or misrepresented in the following post.

Massive Brand building and wide distribution- Two essential components of an FMCG company to sustain it’s growth and survive in the hostile market. Patanjali has defied these odds to become the fastest growing company in the FMCG sector. It has achieved a turnover of Rs 5000 crores and is expected to double it this year.

While the reasons for its rise to prominence has been discussed and dissected several times by several people – ranging from analysts to students, what has not been talked about much is its marketing strategy. According to recently released reports Patanjali has inserted almost 1.14 million Ads in total. What is even more astonishing is the amount of money used to achieve this. It has used up to Rs 300 crore of advertising. This is normally one tenth of the amount used by big FMCG companies for marketing.

Patanjali has pulled off this seemingly impossible feat by putting a big chunk of its Ad’s on TV news channels. With almost 85% of its Ads inserted on all news channels, Patanjali has not only found a cost effective measure to advertise but also get the same amount of reach. This has also enabled it to get attention of mature audience who were previously unaware of the brand and also those who would not have bought Patanjali on Baba Ramdev’s name alone. Another distinct advantage with Advertising in TV channels is it would not be cluttered and thus lost among other Ads. With fewer Ads displayed it would get sufficient screen time and attention as Ads in News Channels is almost an untapped market which has just opened up.